Federal Spending What?

Let's begin with this.
Whose Money ?

Everyone employed in America falls into one of three categories:

1. They are self-employed (me)
2. They are employed in the private sector (the majority of Americans)
3. They are employed in the public sector (teachers, city workers, federal workers, military etc)

This is important in a very simple way, these three categories of people are responsible, directly or indirectly, for all of the revenue of the Federal Government. Remember this when you hear the term Government spending, it may be the government doing the spending but it is those three categories of people, (every employed US citizen's money. I know some will argue that the unemployed pay taxes too, but the fact is that the taxes they pay are derived from the taxes paid by those employed or if the unemployed should find employment then they too will be paying taxes as one of those three categories of persons. Simple, right?

I said that all of the Federal Governments Revenue comes directly or indirectly from these people US. Let's first look at the direct revenue. The following figures are from 2010

Directly

The largest chunk of Federal Revenue comes from Individual Tax Payers 41.6% of all revenues (898.5 billion)

The next largest is payroll taxes (Social Security, Medicare, etc.) 40% of all revenues (864.8 billion)

These are direct revenues paid by individual Americans or their employers to the Federal Government which account for 81.6 % of all Federal Government revenue. There really should be no debate that the majority of Federal revenues is in fact our money, right?

Indirectly

Now for the indirect money whch we all pay to the Federal Government.

The largest of these is Corporate Taxes 8.9% of Federal revenues (191.4 billion)

Although it is popular to say that corporations don't pay their fair share the truth is, as Mitt Romney recently put it, "corporations are people." If corporations pay more in taxes then they must either cut somewhere such as in employee benefits or compensation or they must pass on the extra burden to the consumer-people.

Now it can be argued that some corporate officers make exorbitant salaries and receive immense compensation packages and perks, but in reality those end up being part of the 81.6% of direct revenues to the government. And the truth is that the more you make the more you pay in taxes so those overpaid corporate types actually pay more towards the direct revenue of the Federal Government. There is much more to be said on this but let's keep it simple. Corporations are responsible for almost 9% of all Federal revenues.

Next comes Customs, duties and misc. at 5.6% of all Federal revenues (121.2 billion).

Virtually all of this is ultimately passed onto the consumer and like all the other indirect revenues we pay to the Federal Government is relatively speaking rather minor compared to our direct contributions.

Next is Federal Excise Taxes 3.1% of all Federal Revenues (66.9 billion)

This is the federal taxes on gas, tires and other items. The majority of these could actually be called direct revenues since most of them are paid directly by US, but some are paid by manufacturers and then passed onto us, so we'll call them indirect.

Finally we have Estate and Gift Taxes .09% of Federal Revenues (18.9 billion)

Again these are probably more a direct tax but most of these are paid by dead taxpayers so we'll call them indirect. Actually it is the survivors of the dead taxpayers who pay this but as you can tell it is a very small portion of Federal revenues even if a very large sum for the individuals who have to pay it.

So there you have it, that is all the revenues that come into the Federal Government. To save you the trouble that is almost 2.263 trillion dollars. How much did we spend? Just over $3.456 trillion which left us with a deficit of almost 1.3 trillion dollars. How ridiculous is a 1.3 trillion dollar deficit in one year? Well the entire US Government ran on 1.3 trillion dollars way back in, guess? Can you guess how long ago the Federal Government ran on 1.3 trillion dollars? Think about it. Where do the revenues come to pay for that 1.3 trillion difference between what we give the Federal Government and they spend? The tooth fairy? No from future taxpayers either you or your children or their children or....

The point of this is to show that when we talk about Federal Spending we are not talking about some mysterious entity out there spending their money that benefits us. We are talking about our money being taken from us in one way or another and then being spent by a government which is not only wasteful, it is influenced by special interest of all types which more and more determine how that money, our money, is spent to benefit their...well their special interest.

Just too big

It is not as if all these special interest are bad, most are actually good, well for their special interest. And it is not as if the politicians that pander to these special interest are bad, it is just that the system has devolved into a corruption of governance. Why? Because the Federal Government has so much of our money and so much power that more and more special interest need to go to it in order to survive or to prosper. It is not the special interests which have corrupted government as much as it is an out of control Federal Government that has created an environment where only special interests can gain access. Why?

Simply because the Federal Government has grown so large with so much of our money that it has lost all semblance of being a government "for and by the people" and instead has become a gluttonous entity that has lost the trust of the very people it is supposed to serve. A recent poll shows that just 23% of Americans believe that the Federal Government has the consent of the governed. Here is why:

The Political Class, however, strongly disagrees. Seventy-nine percent (79%) of those in the Political Class believe the government does have the consent of the governed. Seventy-five percent (75%) of Mainstream voters don't share that view.

Do you see the total disconnect here? The people in government think they are serving US while those out of government do not. How can this be? They live in a bubble within a government so large that they do not even have to understand the rest of the country in order to feel as if they are doing what is right for the country, the process of government is their nation rather than the nation itself.

What is the solution? There is only one solution, shrink the size of the Federal Government. Disperse it's power back to the states and localities closer to the people where it is most responsible.

Taxes are not the problem, it is not about the money, it is about the power that the taxes and the money gives to an out of control Federal Government which has totally lost sight of its intended purpose. Which is? To protect the liberties of its people.

In 1991 the Federal Government ran on the amount of the deficit spending in 2010. In twenty years we have gone from a Federal Government that could operate for a year on 1.3 trillion to one that spends 1.3 trillion dollars more than it brings in.

Whose money?

Our money.